Select committee: Digital, Culture, Media and Sport Committee
Recommendation 3
Fourteenth Report - NFTs and the Blockchain: the risks to sport and culture
Published 11 Oct 2023
Paragraph 29
Addressed to Department for Culture, Media and Sport
Digital, Culture, Media and Sport Committee Non-fungible tokens (NFTs) and the blockchain All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The recent plateaus in professional sports leagues’ revenues and the zero-risk nature of crypto revenue for clubs has incentivised partnerships between professional sport and crypto companies. However, the unique relationship between clubs and fans means that fan speculation on sport-based cryptoassets carries a real risk of financial harm to fans and reputational harm to clubs. We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups. We recommend that any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens.
From: Digital, Culture, Media and Sport Committee, Fourteenth Report - NFTs and the Blockchain: the risks to sport and culture (HC 598), paragraph 29, 11 October 2023
Government response
The government responded to the whole report on 12 January 2024 (deadline 11 January 2024).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government responds to the Committee's NFT report by setting out existing protections and ongoing work, declining a new code of conduct and the requested Article 17 analysis, while committing to engage with NFT marketplaces.
- On a code of conduct for online marketplaces, the Government "does not intend to introduce" one, saying stakeholder engagement showed "a code was not needed at that time" and that it is "not aware of any evidence" to change this for NFT marketplaces.
- On analysis of Article 17 of the Digital Single Market Directive, the Government is "unable to conduct this analysis at present" as "more time is required". It will engage with NFT marketplaces, which "will help to inform any future, potential policy approach".
- On fan tokens, the Government says they will not form part of the Independent Football Regulator's assessment of fan engagement, which will review "the structures in place for consulting a representative group of supporters".
- On misleading NFT advertising, the Government "will introduce a new regulatory framework" to combat scam and fraudulent advertising, including advertising relating to NFTs, requiring in-scope organisations in the advertising supply chain to have "proportionate systems and processes" in place.